countries

Oman is a middle-income economy that is heavily dependent on dwindling oil resources. Because of declining reserves, Muscat has actively pursued a development plan that focuses on diversification, industrialization, and privatization, with the objective of reducing the oil sector's contribution to GDP to 9% by 2020. Tourism and gas-based industries are key components of the government's diversification strategy. By using enhanced oil recovery techniques, Oman succeeded in increasing oil production, giving the country more time to diversify, and the increase in global oil prices throughout 2010 provides the government greater financial resources to invest in non-oil sectors.

One of the most recognised African nations, Egypt was a powerful force in ancient history before falling under the control of a number of empires, eventually gaining independence from the British Empire in 1936. With a population of more than 82 million, it is the 16th most populous nation on earth, with only Ethiopia (90.8m) and Nigeria (155.2m) out-populating it in Africa. Egypt also provides the only land border with another region, with Gaza (11km) and Israel (266km) marking the frontier to the Middle East. Its other neighbours are Libya (1,115km) to the west and Sudan (1,273km) to the south.

A wave of protests of relatively loosely organized youth groups with support of Islamist and civil organizations forced an end to the 30+ years of Mubarak rule. In February the ever-present military took power by appointing an interim civil government, which made it very clear -right from the start- to be willing to honor all existing international financial and diplomatic obligations.

Parliamentary and presidential elections plus a referendum on a potentially controversial new constitution are announced for the coming nine months.

An improved security environment and an initial wave of foreign investment are helping to spur economic activity, particularly in the energy, construction, and retail sectors. Broader economic improvement, long-term fiscal health, and sustained increases in the standard of living still depend on the government passing major policy reforms and on continued development of Iraq's massive oil reserves. Although foreign investors viewed Iraq with increasing interest in 2010, most are still hampered by difficulties in acquiring land for projects and by other regulatory impediments. Iraq's economy is dominated by the oil sector, which provides over 90% of government revenue and 80% of foreign exchange earnings. Since mid-2009, oil export earnings have returned to levels seen before Operation Iraqi Freedom and government revenues have rebounded, along with global oil prices.

The Central Bank has successfully held the exchange rate at approximately 1,170 Iraqi dinar/US dollar since January 2009. Inflation has decreased consistently since 2006 as the security situation has improved. However, Iraqi leaders remain hard pressed to translate macroeconomic gains into improved lives for ordinary Iraqis. Unemployment remains a problem throughout the country. Reducing corruption and implementing reforms - such as bank restructuring and developing the private sector - would be important steps in this direction.

Syrian economic growth remained in the 4-5% range in 2008-10 even though the global economic crisis affected oil prices and the economies of Syria's key export partners and sources of investment. Damascus has implemented modest economic reforms in the past few years, including cutting lending interest rates, opening private banks, consolidating all of the multiple exchange rates, raising prices on some subsidized items, most notably gasoline and cement, and establishing the Damascus Stock Exchange - which began operations in 2009. In addition, President ASAD signed legislative decrees to encourage corporate ownership reform, and to allow the Central Bank to issue Treasury bills and bonds for government debt. Nevertheless, the economy remains highly controlled by the government. Long-run economic constraints include declining oil production, high unemployment, rising budget deficits, and increasing pressure on water supplies caused by heavy use in agriculture, rapid population growth, industrial expansion, and water pollution.

Syrian agriculture produces much of the foodstuffs the country needs. 26% of the land is classified as arable, but large areas lie unused because of lack of water. In most cases is irrigation necessary, as most of the rain falls outside the growing season. The quality of the soil is threatened by insufficient use of fertilizers and not rotating of crops.

The main produce include wheat, barley, maize and millet; cotton; lentils, onions, potatoes and sugar beets; olives, grapes, apples, citrus fruits; and tobacco. Equally important is the breeding of livestock, including sheep, cattle, camels and poultry. Syria's main export crops are wheat and barley, and cotton. Fisheries are little developed, and boats are small or medium sized. Fish include sardines, tuan, groupers, tunny and red and gray mullet.

Syrian industries still include many handmade products which often turn out decorative objects, mainly sold to Syrians themselves, but also to foreign visitors. Syria has a large production of wool, cotton, nylon textiles and natural silk.

Lebanon has a free-market economy and a strong laissez-faire commercial tradition. The government does not restrict foreign investment; however, the investment climate suffers from red tape, corruption, arbitrary licensing decisions, high taxes, tariffs, and fees, archaic legislation, and weak intellectual property rights. The Lebanese economy is service-oriented; main growth sectors include banking and tourism. The 1975-90 civil war seriously damaged Lebanon's economic infrastructure, cut national output by half, and all but ended Lebanon's position as a Middle Eastern entrepot and banking hub. In the years since, Lebanon has rebuilt much of its war-torn physical and financial infrastructure by borrowing heavily - mostly from domestic banks. In an attempt to reduce the ballooning national debt, the Rafiq HARIRI government in 2000 began an austerity program, reining in government expenditures, increasing revenue collection, and passing legislation to privatize state enterprises, but economic and financial reform initiatives stalled and public debt continued to grow despite receipt of more than $2 billion in bilateral assistance at the 2002 Paris II Donors Conference. The Israeli-Hizballah conflict in July-August 2006 caused an estimated $3.6 billion in infrastructure damage, and prompted international donors to pledge nearly $1 billion in recovery and reconstruction assistance. Donors met again in January 2007 at the Paris III Donor Conference and pledged more than $7.5 billion to Lebanon for development projects and budget support, conditioned on progress on Beirut's fiscal reform and privatization program. An 18-month political stalemate and sporadic sectarian and political violence hampered economic activity, particularly tourism, retail sales, and investment, until the new government was formed in July 2008. Political stability following the Doha Accord of May 2008 helped boost tourism and, together with a strong banking sector, enabled real GDP growth of 7% per year in 2009-10 despite a slowdown in the region

Saudi Arabia has an oil-based economy with strong government controls over major economic activities. It possesses about 20% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC. The petroleum sector accounts for roughly 80% of budget revenues, 45% of GDP, and 90% of export earnings. Saudi Arabia is encouraging the growth of the private sector in order to diversify its economy and to employ more Saudi nationals. Diversification efforts are focusing on power generation, telecommunications, natural gas exploration, and petrochemical sectors. Almost 6 million foreign workers play an important role in the Saudi economy, particularly in the oil and service sectors, while Riyadh is struggling to reduce unemployment among its own nationals. Saudi officials are particularly focused on employing its large youth population, which generally lacks the education and technical skills the private sector needs. Riyadh has substantially boosted spending on job training and education, most recently with the opening of the King Abdallah University of Science and Technology - Saudi Arabia's first co-educational university. As part of its effort to attract foreign investment, Saudi Arabia acceded to the WTO in December 2005 after many years of negotiations. The government has begun establishing six "economic cities" in different regions of the country to promote foreign investment and plans to spend $373 billion between 2010 and 2014 on social development and infrastructure projects to advance Saudi Arabia's economic development.

The UAE has an open economy with a high per capita income and a sizable annual trade surplus. Successful efforts at economic diversification have reduced the portion of GDP based on oil and gas output to 25%. Since the discovery of oil in the UAE more than 30 years ago, the UAE has undergone a profound transformation from an impoverished region of small desert principalities to a modern state with a high standard of living. The government has increased spending on job creation and infrastructure expansion and is opening up utilities to greater private sector involvement. In April 2004, the UAE signed a Trade and Investment Framework Agreement with Washington and in November 2004 agreed to undertake negotiations toward a Free Trade Agreement with the US, however, those talks have not moved forward. The country's Free Trade Zones - offering 100% foreign ownership and zero taxes - are helping to attract foreign investors. The global financial crisis, tight international credit, and deflated asset prices constricted the economy in 2009 and 2010. UAE authorities tried to blunt the crisis by increasing spending and boosting liquidity in the banking sector. The crisis hit Dubai hardest, as it was heavily exposed to depressed real estate prices. Dubai lacked sufficient cash to meet its debt obligations, prompting global concern about its solvency. The UAE Central Bank and Abu Dhabi-based banks bought the largest shares. In December 2009 Dubai received an additional $10 billion loan from the emirate of Abu Dhabi. The economy is expected to continue a slow rebound. Dependence on oil, a large expatriate workforce, and growing inflation pressures are significant long-term challenges. The UAE's strategic plan for the next few years focuses on diversification and creating more opportunities for nationals through improved education and increased private sector employment.

Despite the global financial crisis, Qatar has prospered in the last several years - in 2010 Qatar had the world's highest growth rate. Qatari authorities throughout the crisis sought to protect the local banking sector with direct investments into domestic banks. GDP rebounded in 2010 largely due to the increase in oil prices. Economic policy is focused on developing Qatar's non-associated natural gas reserves and increasing private and foreign investment in non-energy sectors, but oil and gas still account for more than 50% of GDP, roughly 85% of export earnings, and 70% of government revenues. Oil and gas likely have made Qatar the highest per-capita income country - ahead of Liechtenstein - and the country with the lowest unemployment. Proved oil reserves of 25 billion barrels should enable continued output at current levels for 57 years. Qatar's proved reserves of natural gas exceed 25 trillion cubic meters, about 14% of the world total and third largest in the world. Qatar's successful 2022 world cup bid will likely accelerate large-scale infrastructure projects such as Qatar's metro system and the Qatar-Bahrain causeway.

Bahrain is one of the most diversified economies in the Persian Gulf. Highly developed communication and transport facilities make Bahrain home to numerous multinational firms with business in the Gulf. As part of its diversification plans, Bahrain implemented a Free Trade Agreement (FTA) with the US in August 2006, the first FTA between the US and a Gulf state. Bahrain's economy, however, continues to depend heavily on oil. Petroleum production and refining account for more than 60% of Bahrain's export receipts, 70% of government revenues, and 11% of GDP (exclusive of allied industries). Other major economic activities are production of aluminum - Bahrain's second biggest export after oil - finance, and construction. Bahrain competes with Malaysia as a worldwide center for Islamic banking and continues to seek new natural gas supplies as feedstock to support its expanding petrochemical and aluminum industries. Unemployment, especially among the young, is a long-term economic problem Bahrain struggles to address. In 2009, to help lower unemployment among Bahraini nationals, Bahrain reduced sponsorship for expatriate workers, increasing the costs of employing foreign labor. The global financial crisis caused funding for many non-oil projects to dry up and resulted in slower economic growth for Bahrain. Other challenges facing Bahrain include the slow growth of government debt as a result of a large subsidy program, the financing of large government projects, and debt restructuring, such as the bailout of state-owned Gulf Air.

Kuwait has a geographically small, but wealthy, relatively open economy with self-reported crude oil reserves of about 102 billion barrels - about 9% of world reserves. Petroleum accounts for nearly half of GDP, 95% of export revenues, and 95% of government income. Kuwaiti officials have committed to increasing oil production to 4 million barrels per day by 2020. The rise in global oil prices throughout 2010 is reviving government consumption and economic growth as Kuwait experiences a 20% increase in government budget revenue. Kuwait has done little to diversify its economy, in part, because of this positive fiscal situation, and, in part, due to the poor business climate and the acrimonious relationship between the National Assembly and the executive branch, which has stymied most movement on economic reforms. Nonetheless, the government in May 2010 passed a privatization bill that allows the government to sell assets to private investors, and in January passed an economic development plan that pledges to spend up to $130 billion in five years to diversify the economy away from oil, attract more investment, and boost private sector participation in the economy. Increasing government expenditures by so large an amount during the planned time frame may be difficult to accomplish.

Jordan's economy is among the smallest in the Middle East, with insufficient supplies of water, oil, and other natural resources, underlying the government's heavy reliance on foreign assistance. Other economic challenges for the government include chronic high rates of poverty, unemployment, inflation, and a large budget deficit. Since assuming the throne in 1999, King ABDALLAH has implemented significant economic reforms, such as opening the trade regime, privatizing state-owned companies, and eliminating most fuel subsidies, which in the past few years have spurred economic growth by attracting foreign investment and creating some jobs. The global economic slowdown, however, has depressed Jordan's GDP growth. Export-oriented sectors such as manufacturing, mining, and the transport of re-exports have been hit the hardest. The Government approved two supplementary budgets in 2010, but sweeping tax cuts planned for 2010 did not materialize because of Amman's need for additional revenue to cover excess spending. The budget deficit is likely to remain high, at 5-6% of GDP, and Amman likely will continue to depend heavily on foreign assistance to finance the deficit in 2011. Jordan's financial sector has been relatively isolated from the international financial crisis because of its limited exposure to overseas capital markets. Jordan is currently exploring nuclear power generation to forestall energy shortfalls.

The Jordanian market is a little bit better than the rest of the region, and definitely better than Europe and the States.

The sector is also considered a backbone of the local economy with over 10% direct contribution to the local GDP and offers thousands of job opportunities. It also plays an essential role in providing an attractive environment for foreign investments that need strong infrastructure and up to date technology.

Jordan receives substantial direct financial, economic development, and military aid from the US; the EU (plus from Britain and many other individual EU states); many Arab states; a host of international banking institutions (World Bank, IMF, etc.) and international NGOs.

The West Bank - the larger of the two areas comprising the Palestinian territories - experienced a high single-digit economic growth rate in 2010 as a result of inflows of donor aid, the Palestinian Authority's (PA) implementation of economic and security reforms, and the easing of some movement and access restrictions by the Israeli Government. Nevertheless, overall standard-of-living measures remain near levels seen prior to the start of the second intifada in 2000. The almost decade-long downturn largely has been a result of Israeli closure policies - a steady increase in movement and access restrictions across the West Bank in response to Israeli security concerns which have disrupted labor and trade flows, industrial capacity, and basic commerce, both external and internal. Since 2008, the PA under President Mahmoud ABBAS and Prime Minister Salam FAYYAD has implemented a largely successful campaign of institutional reforms that has contributed to increased security and economic performance, supported by more than $3 billion in direct foreign donor assistance to the PA's budget since 2007. An easing of some Israeli restrictions on West Bank movement and access since 2008 also has contributed to an uptick in retail activity in larger cities. The biggest impediments to economic improvements in the West Bank remain Palestinians' lack of access to land and resources in Israeli-controlled areas, import and export restrictions, and a high-cost capital structure. Absent robust private sector growth, the PA will continue to rely heavily on donor aid for its budgetary needs.

According to the PA's Ministry of Finance, the government revenues increased during 2009, by 0.2% compared with 2008. The revenues earnings during 2009 were USD 1.7 billion. This coincided with the increased level of income for public expenditures, since public expenditure increased by 9.7% compared with 2008. The numbers concerning unemployment rate decreased in 2009 by 5.8% compared with 2008.